Research On Cost Management In New Product Development

As China joined the WTO, the enterprises in our country began to meet with fiercer competition. How to reduce the manufacture and operating cost as well as increase the productivity has been the key point of improving the competitiveness of all the enterprises. As a result, more and more enterprises begin to attach importance to the cost management.In fact, many enterprises only make the cost management in the way of concurrent control and reflection afterwards. But, as some studies show most of the future cost has been locked during the new product development stage. In the following stages, there is little room for cost reduction. Therefore, effective cost management in new product development can improve the cost management of the whole company.The main subject of this article is to discuss how to make the cost management in new product development. In fact, this article is composed of three parts.Part one, is about the research on the theory of the cost management in new product development. In the beginning, it gives the introduction of all the research on this subject, and summarizes the research achievements on the cost management in new product development in the fields of accounting and engineering science respectively. Then, beginning with the analysis of the connotation and the effect of the cost management, it discusses the characteristics of the cost management in new product development, which is different from the cost management in other phases. Then, it states the necessity of the cost management in this stage: (1) The fierce competition make the enterprises pay more attention to the cost, as a result, the enterprises begin to pay attention to the cost management in new product development; (2) Most of the cost has been locked in the new product development stage, so it is very important to make this kind of cost management. In the end, this part introduces the status of the cost management in new product development inreality.Part two, is about the research on the methods of the cost management in new product development. In this part, it mainly discusses two methods of the cost management in new product development: target costing and activity-based costing. What's more, it applies two cases to analyze them respectively. In addition, because the enterprises have different situations, many of them have not the conditions to put these methods in practice; they have met with many problems. Therefore, these enterprises choose other methods of cost management, and they are effective to some extent. This part also introduces these methods.Part three, is a conclusion. This part also puts forward some suggestions about how to make the cost management in new product development.As a whole, the research on this subject is very scattered. So, one of the innovations of this article is to discuss the subject systemically, to put forward my own opinion on the definition, content and characteristics of the cost management in new product development, and to make a conclusion of all the important methods of it. The other innovation of the article is to give some my own suggestion about how to make the cost management in practice.